The Second New Deal

The impact of the early New Deal programs was mixed at best. While the gross national product did inch upward between 1933 and 1935, about ten million Americans remained out of work. Public support for Roosevelt remained strong, however. The 1934 congressional elections broke tradition and resulted in the Democrats actually increasing their numbers in the House and the Senate. The period after the midterm elections, often called the Second New Deal, had a stronger focus on social reform. It was also the time that the president's policies faced challenges from the left and the right, as well as from the Supreme Court.

Challenges to the New Deal. Although an early supporter of the president, Senator Huey Long of Louisiana was seen as a potential rival for Roosevelt in 1936 or a strong candidate for the Democratic nomination in 1940. Long developed his own economic recovery program, known as Share the Wealth, which called for giving every American family $5,000 to buy a house, car, and radio, plus a guaranteed annual income of $2,500. Long was assassinated in 1935, but his ideas on the redistribution of wealth remained popular. Dr. Frances Townsend, a retired physician, responded to the plight of the elderly with a plan to give $200 a month (raised from a tax on business transactions) to every American over the age of 60 who was retired or agreed to retire. Townsend believed that early retirement would open up jobs for younger workers and that the requirement for all the money to be spent within the month would stimulate the economy. By 1936, Townsend Clubs across the country boasted 3.5 million members, making senior citizens a potent political force. On the extreme right, the Detroit‐based Catholic priest Father Charles Coughlin founded the National Union of Social Justice and used his weekly radio program to blame the country's economic woes on a conspiracy of bankers and Jews. His anti‐Semitic diatribes reached 30 to 40 million listeners.

The Supreme Court also challenged Roosevelt, declaring key elements of the New Deal unconstitutional. The NIRA was struck down in 1935 in Schechter Poultry Corporation v. United States, popularly known as the “sick chicken case.” The plaintiffs were accused of violating the NRA fair‐competition codes for selling chicken that was unfit to eat. Additionally, the Court found that the legislation gave too much power to the executive branch in drafting the codes and went beyond the Constitution by attempting to regulate intrastate commerce. In the following year, the AAA was invalidated due to the processing tax on middlemen in United States v. Butler. New laws were enacted, such as the Soil Conservation and Domestic Allotment Act (1936) and the Second Agricultural Adjustment Act (1938), to maintain the program of reducing production while meeting the objections of the Court.

New federal programs. In April 1935, Congress passed the Emergency Relief Appropriation Act with the largest portion of its funding earmarked for the Works Progress Administration (WPA). Over the next eight years, the WPA provided 8.5 million Americans with jobs building highways, parks, bridges, and airports. The new agency also expanded the definition of relief to include men and women in the arts who were on welfare. A series of programs provided employment to writers (Federal Writers' Project), actors (Federal Theater Project), artists (Federal Art Project), and musicians (Federal Music Project). The WPA was renamed the Works Projects Administration in 1939.

Roosevelt's answer to the Townsend Plan was the Social Security Act (August 1935), which has proved to be the most enduring legislation of the New Deal. Its key feature created a pension fund for retired people over the age of 65 and their survivors that was financed by a small payroll tax paid by both workers and employers. Payments were initially quite small ($22 a month in 1940), and the administration emphasized that social security was intended to supplement other sources of retirement income. The act also established an unemployment compensation program with the states based on an additional payroll tax paid by employers. The Social Security Act also provided money to states to help them meet the cost of their own pension plans and helped to fund state old‐age assistance, dependent children and child welfare, and public heath programs. However, the Social Security Act had several drawbacks — farm workers, domestics, and the self‐employed were not covered, and the payroll tax, in addition to reducing the income of the working poor, took a considerable amount of money out of circulation at a time when spending was needed to improve the economy.

The labor movement won a significant victory with the passage of the National Labor Relations Act (1935). Popularly known as the Wagner Act after its chief sponsor, Senator Robert Wagner of New York, the law restored the protections given to workers under the NIRA, such as the right of unions to organize and to enter into collective bargaining agreements. The National Labor Relations Board was established to supervise union elections, to certify the results, and to investigate alleged unfair labor practices by employers. The Wagner Act led to a growth in union membership, as did the Committee for Industrial Organization (1935) that attracted unskilled workers in industrial unions. Originally part of the American Federation of Labor, it was reorganized as a separate and competing group as the Congress of Industrial Organization (CIO) in 1938. The CIO had success in unionizing both the automobile and steel industries through several major and occasionally violent strikes in 1937.

Minorities, women, and the New Deal. African‐Americans were hard hit by the Depression, and although the social programs of the New Deal helped many, discrimination persisted. The CCC camps were segregated, the administration's agricultural policies had the effect of driving black farmers (often tenants or sharecroppers) off the land, and relief payments for blacks were significantly lower than for whites in the South. However, African‐Americans were employed in New Deal agencies and more were appointed to jobs with the federal government than ever before. Mary McLeod Bethune, for example, served on the advisory committee of the National Youth Administration and was a leader of the so‐called “black cabinet” that met in her home. But the president was not a civil rights advocate. Because he needed the southern vote, Roosevelt supported neither anti‐lynching legislation nor a bill to abolish the poll tax. Eleanor Roosevelt, on the other hand, openly supported African‐American causes. When the Daughters of the American Revolution refused to allow the black singer Marion Anderson to use Constitution Hall, the First Lady resigned her membership in the organization and arranged for Anderson to give a concert on the steps of the Lincoln Memorial.

The Depression and the Roosevelt administration affected other minorities as well. Beginning during World War I and continuing into the 1920s, a large number of Mexicans were recruited for jobs in factories and on farms in the United States. As industrial unemployment soared and the depression in agriculture intensified, the response on all levels of government was to deport or “repatriate” workers and their families, including American‐born children who were U.S. citizens, back to Mexico. According to one estimate, the Spanish‐speaking population of the country declined by half a million during the 1930s as a result of this policy. A significant change in policy toward Native Americans also occurred during the Roosevelt years. Under Commissioner of Indian Affairs John Collier, the assimilationist goals of the past were abandoned in favor of a new respect for tribal culture. The Indian Reorganization Act of 1934 provided for tribal control over the land, removed Native Americans from the jurisdiction of the state courts, and supported reviving old customs and traditions. The reforms met with a mixed response from the tribes themselves.

The New Deal also created employment opportunities for women, including bringing more women into the federal government. The appointment of Frances Perkins to the cabinet was an important milestone, and Perkins, in turn, placed women in key positions in the Department of Labor. Under Roosevelt, the first women also served as ambassadors and on the federal bench. Even though no women worked in the CCC, about 500,000 did find employment through the WPA, albeit at lower wages than men. This discrepancy is not surprising since the NRA codes for industries that had a large number of female workers (for example, clothing manufacture) also set their minimum wages lower. Although Eleanor Roosevelt was certainly a positive role model, the perception of women in the 1930s as primarily housewives and mothers did not change dramatically.

The election of 1936. Roosevelt accepted the nomination for a second term and considered the election a referendum on himself and his policies. The “New Deal coalition,” which included immigrants (including second and third generation Catholics and Jews), urban voters, Southerners, Midwest farmers, and labor organizations, supported him. Additionally, African‐Americans, who had traditionally voted Republican since Reconstruction, switched to the Democratic Party in significant numbers for the first time. The results of the election were never in doubt. Roosevelt defeated Governor Alf Landon of Kansas with 523 electoral votes to 8 and almost 28 million popular votes to Landon's less than 17 million.